One of the most common questions people ask when reviewing their estate is:
“Is there a way to avoid probate?”
The honest answer is yes, sometimes, and often partially.
In Canada, and particularly in British Columbia, probate is a standard part of settling many estates. It confirms that your will is valid and gives your executor the legal authority to act. But while probate serves an important purpose, it can also come with costs and delays that families would prefer to minimize.
In B.C., probate fees are roughly 1.4% of the estate value above $50,000. For many homeowners in Parksville and Qualicum, where real estate makes up a large portion of wealth, that can translate into a meaningful expense. On top of that, the process can take several months, during which some assets may be difficult for your executor to access.
The good news is that not all assets have to go through probate, and that’s where thoughtful planning comes in.
One of the simplest strategies is naming beneficiaries on registered accounts like RRSPs, RRIFs, and TFSAs. When a beneficiary is properly designated, these funds can pass directly to that person, bypassing the estate altogether. It’s a small administrative step that can make a significant difference.
Another common approach is joint ownership, particularly between spouses. When one spouse passes away, jointly held assets typically transfer automatically to the surviving spouse. However, using joint ownership with adult children can be more complicated than it appears, and should be approached carefully to avoid unintended tax or legal issues.
Life insurance is another useful tool. Proceeds from a life insurance policy generally flow directly to the named beneficiary, outside of the estate. This can provide immediate liquidity to cover expenses, taxes, or simply ensure funds are available without delay.
Then there’s an option, many people aren’t as familiar with segregated funds.
Segregated funds are investment products offered through insurance companies. Like mutual funds, they can be invested in a mix of equities and fixed income. What makes them different is their structure. Because they are insurance contracts, they allow you to name a beneficiary. In many cases, this means the value of the investment can pass directly to that beneficiary, bypassing probate.
They can also offer additional features, such as:
- Death benefit guarantees, often protecting 75% to 100% of the original investment
- Creditor protection in certain situations
- Privacy, since they do not form part of the public probate record
That said, segregated funds are not a one-size-fits-all solution. They typically come with higher fees than traditional investments, so it’s important to weigh the benefits against the cost. The key takeaway is this: probate planning isn’t about avoiding everything; it’s about being intentional. By structuring certain assets to pass outside the estate, you can reduce costs, speed up the process, and make life easier for your family.
A will is essential but it’s only one part of the picture. How your assets are set up today plays a big role in what your family experiences tomorrow. If you haven’t reviewed how your accounts are structured or whether your beneficiaries are up to date, it may be worth having a conversation with your investment advisor. A quick review today can uncover small adjustments that help reduce probate, simplify your estate, and make things easier for your family down the road.
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This information has been prepared by Devon Ethier who is an Investment Advisor for iA Private Wealth Inc. Opinions expressed in this article are those of the Investment Advisor only and do not necessarily reflect those of iA Private Wealth Inc. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.
